AES Corp has agreed to sell its 47.3 percent of AES Brasil to Auren Energia. Leap carries the deal at an enterprise value of about $1.47 billion, and its structured record works out at $0.16 million per MW. On that number, AES Brasil would be the cheapest Brazilian hydro deal Leap records by a wide margin. The number is real. What it divides is the problem.
Key takeaways
- AES Corp announced on 15 May 2024 that it had signed an agreement to sell its 47.3 percent equity interest in AES Brasil to Auren Energia, with Itau BBA acting as financial advisor to AES.
- Enerdatics calculates the enterprise value of AES's 47.3 percent stake in AES Brasil at about $1.47 billion, made up of $640 million of equity at about $2.24 per share and about $838 million of attributable net debt.
- AES Brasil reported revenue of $675.15 million and EBITDA of $317 million for the twelve months to 31 March 2024, and net debt of $1.7 billion in its first quarter 2024 statements.
- AES Brasil's portfolio totals about 9 GW, of which 4.4 GW was operational (2.6 GW hydro, 1.5 GW wind and 0.3 GW solar), 725 MW under construction and 4 GW under development at the time of the deal.
- Grossed up to 100 percent, the AES Brasil deal implies an enterprise value of about $3.12 billion, or roughly $0.71 million per operational MW, below every other priced Brazilian hydro deal Leap records from 2023 to 2025.
What is Auren actually paying for?
A stake in a whole listed company, not a set of power plants. AES Brasil is a 100 percent renewable generator set up in 1997. Its core is 12 large and 3 small hydroelectric plants along the Tiete River Basin and other major rivers. Around that sits a wind and solar business that is still growing.
The operating wind fleet includes the 386 MW Alto Sertao II complex in Bahia, operating since 2014, the 314 MW Cajuina 1 complex, the 210 MW Ventos do Araripe complex in Piaui and the 64 MW Cassino complex in Rio Grande do Sul. Operating solar includes the 150 MW Guaimbe and 145 MW Ouroeste parks in Sao Paulo. Under construction were the 322 MW Tucano and 370 MW Cajuina 2 wind complexes and a 33 MW solar park.
Leap's record also lists a 4 GW development pipeline, split 2.4 GW wind and 1.6 GW solar, and feasibility work on a 2 GW green hydrogen plant able to produce 800,000 tonnes of green ammonia a year.
How is the price built?
From the share price up. Auren's offer values AES Brasil at about $2.24 per share. That gives an equity value of $640 million for AES's 47.3 percent. Enterprise value adds the debt a buyer takes on, so Enerdatics adds the stake's share of AES Brasil's $1.7 billion of net debt, about $838 million, to reach roughly $1.47 billion.
The structure is flexible. AES Brasil shareholders can choose to take 10, 50 or 100 percent of the exchange ratio in cash, with the balance paid in Auren shares. AES had four months to choose its option and close, after which a ticking fee applies. A ticking fee is a charge that accrues for each period a closing is delayed, which gives the seller a reason not to wait. Completion was also tied to a condition precedent on finishing a late-stage construction project.
AES's reason to sell is capital. It plans to use the proceeds to fund growth in renewables and US utilities, and the sale takes it past half of its $3.5 billion asset sale target through 2027 together with other sales it closed in 2023 and 2024.
Why does $0.16 million per MW understate the price?
Because it divides a 47.3 percent value by 100 percent of the capacity. Leap's structured record sets the $1.478 billion stake value against 9,179 MW. That is the arithmetic error that makes minority stakes look like bargains.
Gross the stake up to the whole company and the enterprise value becomes about $3.12 billion. Against the full 9,179 MW that is roughly $0.34 million per MW. But 9,179 MW counts 4 GW of projects that do not yet exist. Against the 4.4 GW actually operating, the figure is about $0.71 million per MW.
The earnings view lands in a similar place. $3.12 billion against $317 million of EBITDA is about 9.9 times. On either measure the deal is not distressed pricing. It is a valuation of a mixed hydro and wind business with a long contracted tail.
That contracted tail is visible in the record. The Cassino wind complex sells all its output in Brazil's regulated market until 2035 at $51.86 per MWh. Caetes and Ventos do Araripe are contracted until August 2035 at $35.41 and $33.57 per MWh. Wind output is also sold under corporate PPAs with Microsoft, BRF Global and Anglo American.
Enerdatics records 11 Brazilian hydro M&A deals between 2023 and 2025, and nine carry a disclosed value, one of which was later cancelled. Grossed up to 100 percent, the other priced deals run from about $0.81 million per MW for Global Infrastructure Partners' 70 percent of Alianca Energia to about $1.81 million per MW for EDF's purchase of the 261 MW Dardanelos plant from Iberdrola. Vale's purchase of Cemig's 45 percent of Alianca, at $914.2 million, implies about $1.19 million per MW. AES Brasil, at $0.71 million per operational MW, sits below all of them.
What does the deal signal for Brazilian renewables M&A?
That hydro-anchored platforms are being bought whole rather than in pieces. AES Brasil and Alianca are both companies with large legacy hydro fleets and newer wind portfolios attached. In each case the buyer took the platform rather than cherry-picking plants. The timeline of Vale's Alianca Energia shows the same company changing hands twice in a year, with very different implied values.
The discount on AES Brasil is best read as a mix effect. Pure hydro plants with long concessions command more per MW than wind farms on regulated contracts priced in the mid-$30s per MWh. AES Brasil's operating fleet is about 40 percent wind and solar by capacity, and its headline megawatts include a development pipeline that earns nothing yet. At about 9.9 times EBITDA, the buyer is paying for earnings, not for megawatts, and the earnings already reflect that mix.
For AES, the deal shows how a global sponsor recycles capital. Selling a listed Brazilian subsidiary with a hydro core to a local buyer funds a pivot towards US utilities. The flexible cash and share structure gave AES room to choose how much exposure to Auren it kept.
Frequently asked questions
How much is Auren Energia paying for AES's stake in AES Brasil? Enerdatics calculates the enterprise value of AES's 47.3 percent stake at about $1.47 billion, made up of $640 million of equity and about $838 million of attributable net debt.
What does AES Brasil own? About 9 GW in total, including 4.4 GW operating (2.6 GW hydro, 1.5 GW wind and 0.3 GW solar), 725 MW under construction and a 4 GW wind and solar pipeline.
How does the AES Brasil price compare with other Brazilian hydro deals? Grossed up to 100 percent it implies about $0.71 million per operational MW, below every other priced Brazilian hydro deal in Leap from 2023 to 2025, which range from about $0.81 million to $1.81 million per MW.
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